Announced Action(s) for April 21, 2000

Commission authorization of filing of staff comments:Commission action regarding applications for approval:Consent agreements given final approval:

For Your Information

April 21, 2000

The staff of the Federal Trade Commission's Bureaus of Economics and Consumer Protection have filed a comment with the U.S. Food and Drug Administration (FDA) regarding its proposed rule governing trans fatty acid (trans fat) information in food labeling. The impetus for the rule is FDA's recent conclusion that trans fatty acids increase the risk of coronary heart disease by elevating harmful serum cholesterol levels. The FDA has proposed several methods to include trans fat information on the nutrition facts label.

The staff comment notes that providing a separate line item on the nutrition facts label for trans fat information would be preferable to combining trans fat information with saturated fat information. As consumer knowledge about trans fats increases, the comment suggests, a separate listing would prove more informative to them. In addition, while there are currently no explicit dietary recommendations for trans fats, other nutrients for which no Percent Daily Value can be calculated (such as poly- and mono-unsaturated fats) are currently included as separate label items on the nutrition facts label, which thereby enhances consumer comprehension. If the FDA prefers to combine the two types of fats into one line item, the comment suggests, it could do so under a separate category that would be easier for consumers to understand (e.g., a "Cholesterol Raising Fat" category).

Staff also suggests that although a new "Trans Fat Free" (and synonymous) claims in the labeling of foods would likely promote consumer understanding, the FDA also may wish to consider authorizing a definition for "Reduced Trans Fat" to allow for additional marketing flexibility of food products. Lastly, staff suggests that the FDA should consider including a health claim on the label that would inform consumers of the potential link between trans fatty acids and heart disease. Combined with the health-related labels mentioned above, this would help consumers make more informed purchasing decisions. The vote to approve the staff comment was 5-0. (FTC File No. V000003; staff contact is Janis Pappalardo, 202-326-3380.)

The staff of the Federal Trade Commission's Bureaus of Economics and Competition and Policy Planning Office have filed a comment with the Arkansas Public Service Commission (APSC) regarding APSC's proposed market power analysis guidelines in light of Arkansas' recently enacted Electric Consumer Choice Act of 1999, which allows retail customers to choose their electric power supplier. The FTC has a longstanding interest in regulation and competition in energy markets, including proposals to reform regulation of the electric power and natural gas industries.

The staff comment states that the ways in which the APSC has adopted the principles in the DOJ/FTC Horizontal Merger Guidelines to address analysis of existing market power in the electric power industry prior to implementing retail competition are likely to provide an accurate picture of existing market power in Arkansas. In its comment, the staff notes that the APSC may wish to examine market concentration among subsets of power-generation assets based on their dispatch order, as a screen for determining whether more detailed analysis of horizontal market power is needed. The staff comment also recommends the use of computer simulation analysis as a practical method to examine existing market power as market conditions change. In addition, staff suggests that the APSC allow electric utilities to provide an efficiency analysis of joint operation of generation and transmission assets. The Commission vote to approve the staff comment was 5-0. (FTC File No. V000007; staff contact is John C. Hilke, Bureau of Economics, 303-844-3565.)

Following a public comment period, the Commission has ruled on an application for approval of a divestiture from the following: El Paso Energy Corporation. The Commission has approved El Paso's February 11, 2000 application to divest its one-third interest in Destin Pipeline, L.L.C. to BP Amoco Corporation. The application was filed with the FTC pursuant to the order issued in Docket No. C-3915. The vote to approve the divestiture was 4-0, with Commissioner Thomas B. Leary not participating. (FTC File No. 911-0178; C-3915; staff contact is Roberta S. Baruch, 202-326-2861; see press release dated October 22, 1999.)

Following a public comment period, the Commission has made final a consent agreement with the following: Rhodia, Donau Chemi AG and Albright & Wilson PLC. The Commission vote to accept the consent as final was 4-1, with Commissioner Mozelle Thompson dissenting and issuing a separate statement citing his disagreement with the majority's complaint, which "narrowly defines the relevant market for pure phosphoric acid...as within the boundaries of the United States." The full text of the Commissioner's statement is included as an attachment to the final consent package. (FTC File No. 991-0237; staff contact is Robert Tovsky, 202-326-2634; see press release dated March 14, 2000.)

Copies of the documents mentioned in this release are available from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580; 877-FTC-HELP (877-382-4357); TDD for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC NewsPhone recording at 202-326-2710.